How to verify a residential contractor's license and insurance in Texas

A homeowner in the Lower Valley called us last spring after a remodel went sideways. The contractor had a clean website, a truck with a logo, and a business card that said "Licensed and Insured." Halfway through the job he disappeared, the electrical was failing inspection, and a tile supplier was threatening to put a lien on the house. The homeowner asked us a fair question: how was I supposed to know?

The honest answer is that "Licensed and Insured" on a business card means almost nothing in Texas. Here is what to verify instead, before you sign anything.

First, understand what Texas actually licenses

This trips up almost every homeowner. Texas does not license residential general contractors. There is no state exam, no state registration, and no license number to look up for the person running your kitchen remodel or your addition. The City of El Paso does not require a general contractor license either.

What Texas does license is specific trades:

• Electricians are licensed through the Texas Department of Licensing and Regulation.
• Plumbers are licensed through the Texas State Board of Plumbing Examiners.
• Heating and air conditioning contractors are licensed through the Texas Department of Licensing and Regulation as well.

So when someone tells you they are a "licensed contractor," the right follow-up is: licensed in what. A good remodeler will tell you straight that the general contractor side is not licensed in Texas, and then point you to the trade licenses of the people pulling permits on your job.

Verify the trade licenses that matter

The electrical, plumbing, and mechanical work on your project is where a missing license actually costs you. Unpermitted or improperly permitted trade work fails inspection, voids parts of your homeowner's insurance, and becomes your problem when you sell the house.

Ask your contractor who is pulling the electrical and plumbing permits and get their license numbers. Then check them yourself:

1. For electricians and HVAC, search the license number on the Texas Department of Licensing and Regulation license search.
2. For plumbers, use the Texas State Board of Plumbing Examiners license lookup.
3. Confirm the license is active, not expired, and the name matches.

This takes ten minutes and tells you more than any website. If a contractor gets cagey when you ask for the permit-puller's license number, that is your answer.

Get the insurance certificate from the agent, not the contractor

"Insured" is the easiest word on the business card to fake. A real certificate of insurance is a one-page document that lists the carrier, the policy numbers, the coverage limits, and the dates the policy is in force. Two coverages matter for a home project:

• General liability. This pays if the contractor damages your home or a neighbor's property. For a typical El Paso remodel, expect to see at least a one million dollar per-occurrence limit.
• Workers' compensation. This matters more than people think. Texas is the only state that does not require most private employers to carry workers' compensation. If a worker falls off a ladder on your roof and the contractor carries no coverage, the injured worker can come looking at the homeowner. If the contractor has employees, you want to see workers' compensation or a clear explanation of how the crew is covered.

Here is the part that catches people: ask the contractor for the name of their insurance agent, then have the certificate sent to you directly from the agent's office, with your name listed as the certificate holder. A certificate handed to you by the contractor can be expired, edited, or belong to a policy that lapsed last month. One sent from the agency is current and real.

Protect yourself from mechanic's liens

This is the lien risk the Lower Valley homeowner ran into, and it is the one most people have never heard of. Under Texas law, a subcontractor or material supplier who does not get paid by your contractor can file a mechanic's lien against your home. The brutal part is that this can happen even if you already paid your contractor in full. You can pay twice for the same tile.

You reduce this risk with how you structure payment:

• Never pay large sums up front. A reasonable deposit covers initial materials, not a third of the job. Be wary of any contractor who wants half the contract before work starts.
• Pay on a draw schedule tied to completed, inspected milestones. Money follows finished work, not promises.
• Collect lien waivers. At each draw, have the contractor sign a lien waiver for the work being paid, and on bigger jobs collect waivers from the major subcontractors and suppliers too. A waiver is a signed statement that they have been paid and give up their lien rights for that amount.
• Ask for a sub and supplier list on larger projects so you know who could potentially file.

A contractor who pays their subs and suppliers on time has no problem providing waivers. One who hesitates is telling you something about their cash flow.

Check references and the paper trail

Licenses and insurance keep you out of legal trouble. References tell you whether the work will be any good.

• Ask for three recent local jobs, ideally similar in scope to yours, and actually call them. Ask the simple questions: did the schedule hold, were change orders explained before the work, would you hire them again.
• Look for a real business footprint. A registered business name, a physical El Paso address, a history that goes back more than a season. Storm-chasers and fly-by-night remodelers tend to show up after a hailstorm and vanish by the next monsoon.
• Read the reviews with a filter. One angry review is noise. A pattern of "disappeared mid-job" or "would not return calls" is signal.

The contract is your real protection

Everything above means little if it is not written down. A solid residential contract in Texas should name a fixed price or a clear cost structure, a detailed scope of work, an allowance schedule for finishes, a payment draw schedule, a start and substantial-completion window, and a clear process for change orders in writing before any extra work happens. A typical mid-size El Paso remodel contract that runs only a page or two is usually missing the scope that protects you.

If a contractor will not put the scope, the schedule, and the payment terms in writing, none of the license and insurance checks matter. The contract is where your money and your timeline actually live.

A quick word before you sign

If you are weighing a remodel, an addition, or a repair and you want a second set of eyes on a bid or a contract before you commit, send it our way through the form on the residential side of our site. We will give you an honest read on whether the scope, the licenses, and the terms hold up, whether or not the work is ours. It is a short conversation that has saved El Paso homeowners a lot of money and a lot of grief.